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Business and Industry Catering - UK - October 2010

The general mood in contract catering is ‘stable’, ‘survived’, ‘in good shape’, reflecting the fact that food and service management (FSM) companies feel they have endured the worst the recession has to throw at them – even though the next 12 months will be challenging.

However, the largest sector, business and industry (B&I), has been hit hardest.

  • Some seven million employees bring their own lunch, and eat at the canteen. This group represent a valuable pool of opportunity for cross- and up-selling for the canteens, including through smaller items like hot drinks and snacks.
  • Facilitating the use of the canteen for eating lunch brought from home can expand such footfall. The higher awareness of the canteen's offering and prices thus achieved can play an important role in encouraging usage.
  • Healthy options, promoted as such, should be a staple on the canteen menu for them to engage the 6.6 million employees that use canteens and say they are always looking for a healthy option.
  • Effectively communicating their value for money credentials, perhaps including through tastings or promotions, is key for canteens to spark interest among the 14 million employees who have cut back on spending on lunch.
  • Women are noticeably less likely than men to use work canteens. Many women work part-time, suggesting that catering better for flexible working hours including through breakfast, snacking and specialist hot drinks could help canteens engage this market they have somewhat neglected.
  • More exotic dishes or ones that require slow cooking, large batches or many components stand to chime with the more than two in five 16-34-year-olds who tend to choose a lunch they wouldn't make at home.

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Table of contents

  1. Issues in the Market

      • Key issues
        • Definition
          • Terminology
          • Future Opportunities

              • Trend: Over-optioned consumer
                • Trend: Tug of war
                • Market in Brief

                  • Challenging times for workplace caterers
                    • Reduced headcount has an impact on meals served
                      • Non-catering services continue to expand
                        • Contract caterers innovate to meet consumers’ high street expectations
                        • Beyond Cost: Marketing Initiatives Employed by Contract Caterers

                          • Key points
                            • Caterers are operating in a cost-control culture
                              • What ‘else’ can you bring to the table?
                                • The service mix
                                  • First and foremost: Cost savings for all stakeholders
                                    • Growth of FSM – widening the service portfolio
                                      • Be innovative
                                        • Show commitment to sustainability
                                          • High street brands are a crowd-puller
                                            • Not just words, must show progress towards healthy eating
                                              • Key points
                                                • Challenging trading conditions
                                                  • Coalition government focused on deficit reduction
                                                    • Unemployment is the single most influential factor
                                                      • Figure 1: UK monthly unemployment rate, aged 16 and over (seasonally adjusted), by gender, 2005-10
                                                    • Spending confidence continues to affect eating out
                                                      • Figure 2: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
                                                    • Young target population enjoy eating out
                                                    • Strengths and Weaknesses

                                                      • Strengths
                                                        • Weaknesses
                                                        • Competitive Context

                                                          • Key points
                                                            • B&I accounts for one in three meals served
                                                              • Figure 3: Competitive context of the contract catering market, 2008-09
                                                              • Figure 4: Growth in meals and outlets, by share, 2008-09
                                                            • Shrinkage due to contract losses and hospitality cutbacks
                                                              • Figure 5: Total number of outlets in business and industry, 1990-2009
                                                            • How attractive is the business and industry sector to contract caterers?
                                                              • Combating the high street ‘meal deal’
                                                                • Figure 6: Performance of competing markets, market sizes, 2005-09
                                                              • Knowing your enemy
                                                              • Who’s Innovating?

                                                                • Key points
                                                                  • Caterers get involved to freshen up the in-house catering offer
                                                                    • £2,000 kitchen makeover; CH&Co invests in ‘farmers’ market’ style aesthetics to tempt diners
                                                                      • Elior UK makes fresh produce more visible
                                                                        • Compass helps QVC create a more welcoming environment for staff
                                                                          • Celebrity presence breathes new life into corporate dining
                                                                            • Key points
                                                                              • Fewer staff, fewer outlets = higher turnover?
                                                                                • Trends in turnover
                                                                                  • Figure 7: The business and industry contract catering market, 2005-15
                                                                                • Reason for optimism
                                                                                  • Competitors battle it out whether small or large-scale operations
                                                                                    • Caterers toughen up to nil-subsidy and unprofitable tenders
                                                                                      • Future outlook
                                                                                        • Factors used in the forecast
                                                                                        • Segment Performance

                                                                                          • Key points
                                                                                            • Outlet numbers shrink to pre-2002 levels
                                                                                              • Figure 8: Total number of business and industry outlets served by contract caterers, 1991-2009
                                                                                            • B&I sees drastic drop in number of meals served in 2009
                                                                                              • Figure 9: Number of meals in the business and industry market, 1991-2009
                                                                                            • Non-catering offers a buffer
                                                                                            • Companies and Services

                                                                                              • Aramark
                                                                                                  • Figure 10: Financial performance of Aramark Limited, 2008 and 2009
                                                                                                • BaxterStorey
                                                                                                    • Figure 11: Financial performance of BaxterStorey Limited, 2008 and 2009
                                                                                                  • CH&Co
                                                                                                      • Figure 12: Financial performance of Charlton House Limited, 2008 and 2009
                                                                                                    • Compass Group (Eurest Services)
                                                                                                        • Figure 13: Financial performance of Compass Group PLC, 2008 and 2009
                                                                                                        • Figure 14: Six months’ financial performance of Compass Group PLC, 2009 and 2010
                                                                                                      • Elior
                                                                                                          • Figure 15: Financial performance of Elior UK Limited, 2008 and 2009
                                                                                                        • Initial Catering
                                                                                                            • Figure 16: Financial performance of Initial Catering Services Limited, 2008 and 2009
                                                                                                          • Sodexo
                                                                                                              • Figure 17: Financial performance of Sodexo Limited, 2008 and 2009
                                                                                                              • Figure 18: Financial performance for first six months of Sodexo Limited, 2009 and 2010
                                                                                                          • Employee Lunch Preferences – Purchase

                                                                                                            • Key points
                                                                                                                • Figure 19: Outlets used for buying lunch and frequency of visits, July 2010
                                                                                                              • Canteen food quite far down the lunch chain
                                                                                                                • Figure 20: Demographic pattern of those who buy lunch in a work canteen, any frequency, according to above-/below-average responses, July 2010
                                                                                                              • Consumers are spoilt for choice
                                                                                                                • BYO butties
                                                                                                                  • Failing to strike a chord with female employees
                                                                                                                    • Figure 21: Outlets used for buying lunch by any frequency, according to above-/below-average responses, by gender, July 2010
                                                                                                                  • Life’s too short to eat in the same place every day
                                                                                                                    • Figure 22: Repertoire of outlets used for buying lunch, July 2010
                                                                                                                • Employee Lunch Preferences – Consumption

                                                                                                                  • Key points
                                                                                                                      • Figure 23: Lunch purchasing habits at work, July 2010
                                                                                                                    • Sedentary lifestyles and lunch hours
                                                                                                                    • Employee Attitudes towards Lunch Choices

                                                                                                                      • Key points
                                                                                                                          • Figure 24: Statements on eating lunch during the week on workdays, July 2010
                                                                                                                        • Healthy eating gets the thumbs up from canteen users
                                                                                                                          • Disagreement over calorie counting
                                                                                                                            • Breaking lunch habits
                                                                                                                              • Figure 25: Statements on eating lunch during the week on workdays, by most popular outlets used for buying lunch, July 2010
                                                                                                                            • Majority are feeling the pinch
                                                                                                                              • Figure 26: Agreement with the statement ‘I have cut back on spending on lunch in the last year’, by age group, July 2010
                                                                                                                          • Appendix – Broader Market Environment

                                                                                                                              • Figure 27: Trends in the age structure of the UK population, by gender, 2005-15
                                                                                                                          • Appendix – Competitive Context

                                                                                                                              • Figure 28: No. of outlets, by share, 2009
                                                                                                                              • Figure 29: No. of meals served per outlet, 2009
                                                                                                                              • Figure 30: Competitive context of the contract catering market, 2009
                                                                                                                              • Figure 31: Competitive context of the contract catering market, 2009
                                                                                                                          • Appendix – Employee Lunch Preferences – Purchase

                                                                                                                              • Figure 32: Most popular outlets used for buying lunch (any usage), by demographics, July 2010
                                                                                                                              • Figure 33: Next most popular outlets used for buying lunch (any usage), by demographics, July 2010
                                                                                                                              • Figure 34: Outlets used for buying lunch, by repertoire of outlets used for buying lunch, July 2010
                                                                                                                              • Figure 35: Repertoire of outlets used for buying lunch (any usage), by demographics, July 2010
                                                                                                                          • Appendix – Employee Attitudes towards Lunch Choices

                                                                                                                              • Figure 36: Lunch purchasing habits at work, by most popular outlets used for buying lunch (any usage), July 2010
                                                                                                                              • Figure 37: Lunch purchasing habits at work, by next most popular outlets used for buying lunch (any usage), July 2010
                                                                                                                              • Figure 38: Most popular lunch purchasing habits at work, by demographics, July 2010
                                                                                                                              • Figure 39: Next most popular lunch purchasing habits at work, by demographics, July 2010
                                                                                                                          • Appendix – Employee Attitudes towards Lunch Choices

                                                                                                                              • Figure 40: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 41: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 42: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 43: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 44: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 45: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 46: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 47: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 48: Statements on eating lunch during the week on workdays, by demographics, July 2010
                                                                                                                              • Figure 49: Statements on eating lunch during the week on workdays, by most popular outlets used for buying lunch (any usage), July 2010
                                                                                                                              • Figure 50: Statements on eating lunch during the week on workdays, by next most popular outlets used for buying lunch (any usage), July 2010
                                                                                                                              • Figure 51: Statements on eating lunch during the week on workdays, by most popular lunch purchasing habits at work, July 2010
                                                                                                                              • Figure 52: Statements on eating lunch during the week on workdays, by next most popular lunch purchasing habits at work, July 2010
                                                                                                                              • Figure 53: Statements on eating lunch during the week on workdays, by repertoire of outlets used for buying lunch and frequency of visits, July 2010

                                                                                                                          Companies Covered

                                                                                                                          • Aramark Corporation (UK office)
                                                                                                                          • Barclays Bank plc
                                                                                                                          • Bartlett Mitchell
                                                                                                                          • BaxterSmith
                                                                                                                          • BaxterStorey Ltd
                                                                                                                          • Burger King UK Ltd
                                                                                                                          • CH&Co
                                                                                                                          • Charlton House Catering Services
                                                                                                                          • Civil Aviation Authority
                                                                                                                          • Compass Group Plc
                                                                                                                          • Costa
                                                                                                                          • Deutsche Bank AG
                                                                                                                          • Eurest
                                                                                                                          • Fairtrade Foundation (The)
                                                                                                                          • Food Standards Agency
                                                                                                                          • Greggs Plc
                                                                                                                          • HBOS plc (Halifax Bank of Scotland)
                                                                                                                          • HJ Heinz Company UK
                                                                                                                          • Initial Catering Services
                                                                                                                          • J. Sainsbury
                                                                                                                          • JD Wetherspoon
                                                                                                                          • Ladbrokes Ltd
                                                                                                                          • Lehman Brothers [UK]
                                                                                                                          • Lloyds Banking Group
                                                                                                                          • Marine Stewardship Council
                                                                                                                          • Marks & Spencer
                                                                                                                          • McDonald's Restaurants Limited (UK)
                                                                                                                          • Pret A Manger
                                                                                                                          • Procter & Gamble UK & Ireland
                                                                                                                          • PZ Cussons
                                                                                                                          • Rainforest Alliance
                                                                                                                          • Sodexo
                                                                                                                          • Starbucks Coffee Company UK Ltd
                                                                                                                          • T-Mobile (UK) Ltd
                                                                                                                          • Tate & Lyle
                                                                                                                          • Tesco Plc
                                                                                                                          • The British Library
                                                                                                                          • The Royal Institution of Chartered Surveyors
                                                                                                                          • Umbro International Limited
                                                                                                                          • Unilever Bestfoods UK Ltd
                                                                                                                          • Vodafone Group Plc (UK)
                                                                                                                          • Wm Morrison Supermarkets

                                                                                                                          Business and Industry Catering - UK - October 2010

                                                                                                                          US $2,648.76 (Excl.Tax)